Expected Dividend Increases in March

We are coming off of a pretty active month in February.  I have been tracking Dividend Aristocrats that are expected to announce a dividend increase each month since May 2014, and February set a record as 8 companies were expected to announce an increase.   While March won’t pack the same punch with announced increases, it is the most active month in the quarter for receiving dividends!  Time to dive into the details, which Aristocrats are expected to announce dividend increases in March?

Dividend Increases in February

As I mentioned earlier, February was a record-setting month.  Eight companies were set to announce a dividend increase, and many of them were household names that many dividend growth investors own.  Did the companies meet their expectations? Did they decide to follow through and reward their shareholders?

  1. Archer-Daniels-Midland Co (ADM) – As I mentioned last month, ADM is a low yield, high dividend growth company that has averaged a dividend increase of 14.75% over the last three years.  The great news is that the average is going to increase as the company announced a 16.67% dividend increase this month, increasing their quarterly dividend by $.04/share to $.28/share.  A great increase for a company that has had a rough start to 2015, down 6.85%.  A large dividend increase, a yield over the S&P 500, a PE ratio lower than the market, and a stock that is actually down YTD in this market.  This company aces the Dividend Diplomats’ stock screener and is forcing its way onto my watch list going forward. 
  2. Bemis Co Inc (BMS)– BMS continued its trend of announcing a $.01/share increase in its quarterly dividend this month.  Disappointing in my eyes as BMS has a lower yield, 2.32%, than I would expect for a company with small annual increases.  For this kind of growth, I will continue to allocate my shares to T and receive the extra 3% in dividend yield annually.  
  3. Chubb Corp (CB)– To be determined.  CB waits until the last possible moment in February to announce a dividend increase.  Since I am writing this article during the final week of the month, CB still has not announced an increase.  But don’t worry shareholders, I would expect to hear some great news by the end of the week!  Hopefully they continue their high dividend growth trend. 
  4. Coca-Cola Co (KO) – As mentioned last month, KO has averaged an annual dividend increase of ~9% over the last three years.  This year, the company stuck to the trend as KO announced an increase of 8.2% last week.  This increase surprised me considering the headwinds the company has faced recently, as KO announced that 2015 was going to be a transition year for the company.  Once that was announced, I assumed the dividend increase would be lower than expected as it seemed the company was setting the table for bad news.  However, this was a pleasant surprise.  I have contemplated adding KO as a long-term, Dog of the Dow play.  I am sure this thought will continue and more intense research will ensue if the stock continues to face downward pressure throughout the year.  Lanny is probably rolling his eyes and shaking his head at me after reading this as he is a long-time PEP shareholder.  
  5. Genuine Parts (GPC)- As mentioned last month, GPC has averaged an annual dividend increase of 9% over the last three years.  However, this year, GPC announced an increase of $.04/share quarterly, which is only a 7% increase.   Even though the increase was below the average, it is still greater than inflation, which is great news for investors.  The stock is still a little expensive for my liking, as the PE of ~21 is greater than the S&P 500.  But if GPC continues to slide, I will likely pick up shares as I think they are the market leader in a great industry.. GPC operates in the secondary car parts industry, which is especially attractive to me as consumers continue to look for ways to reduce expenses (You can even ask Lanny about how expensive car repairs can get)
  6. Kimberly-Clark (KMB)– Wow, another company that has come in under its three-year average.   KMB only announced an increase of 4.7% this year, which is below their three-year mark of 6.3%.  Even though I love consumer companies that are found in every household, I am going to pass on watching KMB in the short-term as the company has a high PE ratio and a dividend growth rate that is now significantly lower than my current portfolio’s weighted average growth rate (Read more about why we believe the weighted average growth rate is such a crucial metric to monitor).
  7. T. Rowe Price Group (TROW)- Holy cow, I had to stop myself from logging into Sharebuilder and initiating a position in TROW after reviewing their dividend increase.  Not only did TROW announce an 18% increase in their regular dividend, but they announced a $2/share special dividend on top of that.  That is right, a $2/share increase for a stock currently trading at ~$83.50. For those of you interested, that represents a 2.4% gain by itself.  Don’t worry, we still have time as the ex-dividend date for both the regular and special dividend are March 12th and April 17th, respectively.  I’ll be keeping a close eye on this stock, that’s for sure. 
  8. Wal-Mart Stores (WMT)- Last, but definitely not least, Wal-Mart.  WMT was all over the headlines last week, as the company announced a wage hike for employees.  Great news for the current employees, and one that will continue to draw media attention for different reasons.  However, what I was really focused on was the news regarding WMT’s dividend.  Buried within the highly publicized wage increase was the fact that WMT barely moved the needle with their dividend, increasing their annual dividend by $.01/share quarterly, or 2%.  I’m shocked by how quickly the rate in which WMT grew its dividend has slowed over the last couple of years, as this now represents the second year in a row that WMT has only increase its quarterly dividend $.01/share.  So for now, I am going to leave the large retailer off of my watch list and focus my attention elsewhere. 

Expected Dividend Increases in March

I told you February was a record-setting month.  Man were there a lot of dividend increases to review.  Now it is time to stop looking back and start looking forward to what March is set to bring us.  Sadly, we lost one stock that should be included on this list as it was announced that Family Dollar will be acquired.  So now, March is only expected to see two Dividend Aristocrats announced a dividend increase.  Do you own either of these companies?

  1. Air Products & Chemicals Inc (APD)– I am not too familiar with APD, but man has the company had a great year! Over the last 52 weeks, the company’s stock price has increased over 37%.  APD is a low yield, high dividend growth stock as the company has a current yield of 1.9% and a three-year average growth rate of 9.9%.  Due to the high PE ratio, a result of the remarkable build up over the last year, I will not be adding this company to my watch list any time soon.  However, I am excited to see what exactly APD will do this year considering their very strong performance.  Will they announce a very large dividend increase or  a large share-buyback program to keep the positive momentum going?
  2. Colgate-Palmolive (CL)– Well, CL jumped the gun on their dividend increase this month and actually announced their dividend early in February this year!  So let’s take a look at their dividend announcement.  CL announced a dividend increase of $.02/share quarterly, or a 5.5% increase. This is below their three-year average of 7.5% but is in line with their increase from the prior year, 5.8%.  What’s exciting with the announcement is that the dividend increase was also coupled with a $5b share buyback program.  So even though the dividend increase was below their recent average, the company has found other ways to reward their shareholders.  Congrats on the great, early news CL shareholders!

Do you own any of the companies on the list?  What did you think about the many increases announced in February?  Were you disappointed by the results at all, especially from some of the larger companies?  Thanks for stopping by, I am looking forward to your comments!

-Bert

DISCLOSURE: I DO NOT RECOMMEND ANY DECISION TO THE READER or ANY USER, PLEASE CONSULT YOUR OWN RESEARCH. THIS IS ACTUAL DATA, ANALYSIS, HOWEVER I BASE NO INVESTOR RECOMMENDATION.  THANK YOU FOR YOUR UNDERSTANDING.
Facebooktwitterredditpinterestlinkedinmail

18 thoughts on “Expected Dividend Increases in March

  1. I’ve got 3 of the 8: ADM, KMB and TROW!!! Luckily ADM and TROW brought out the big guns! KMB has been disappointing recently, but as long as they keep raising the dividend, I’ll keep them around.

    I’ll keep the others stocks on my watchlist, thanks for the post.

    • ADD,

      No kidding, TROW was not messing around this year. Congrats on receiving that special dividend, I am very jealous! KMB isn’t a sexy company by any means, but it is a great long term company as its products will continue to find their way into everyones home. If the price continues to fall, I will definitely be joining you as a fellow shareholder even though the growth has been lower than expected.

      Have a good one! Thanks for stopping by.

      Bert

  2. Thanks for the excellent update, Bert. I’ve been looking heavily into ADM because I badly need exposure in that sector. Sadly, I only hold a super small position in WMT on this list and they had a stinker dividend raise again this year as you pointed out. I don’t mind sitting on a few hundred bucks in shares hoping for some growth, but I wish it were better and I definitely don’t blame you at all for deleting the company from your watchlist… runaway while you can!!! Hope your week is moving along nicely 🙂

    • Thank you very much Ryan. ADM is a very interesting company, one that I am going to be keeping a close eye on. I would love to enter int the market, and since we can’t purchase Cargil ADM is a great second option. one of the best in the industry with excellent fundamentals that will allow it to continue to reward shareholders going forward. I still don’t know how to feel about WMT. It won’t be going anywhere anytime soon, but it is troubling that they once again offered a sub-par dividend increase. Is this a short or a long term problem, because they have shown flashes of being very generous to you and other shareholders in the past. I would say you could run to TGT, but that company has had quite the run-up over the last year. I should have bought in after the data breach! hindsight is always 20/20 though, right?

      Thanks for stopping by.

      Bert

  3. Good work Bert. I’m closely looking at ADM but it just won’t go down to 45! I’m not sure if I should just pull it now or wait. I need more patience.

    • Thank you very much. Let me ask you this, besides for price, why else are you holding back from investing? If you believe the company is under-valued and a strong dividend growth company (which I believe it is), why let a percent or two get in the way of the purchase. 10 years from now, the difference will be pennies! But that is just my thought. Just make sure you do your research and figure out if it is a great fit and undervalued in your eyes!

      Bert

  4. Bert,
    TROW was not in my radar but with the special dividend, I just have to put it on top of the buying list if I see a price dip. Imagine having a 2.5% regular dividend plus 2.4% special dividend. Thats 4.9% dividend on the first year top it with a high growth rate and and a low payout ratio of less than 50%.

    • TROW came flying onto my radar as well FFF. I have never really considered investing in that industry, but it might be time to investigate further and see what other companies have to offer. It would fill a hole in my portfolio and would provide me with a strong dividend growth company as you pointed out. Keep me updated if you do decide to buy!

      Thanks for stopping by!

      Bert

  5. Omg TROW just did that! That’s awesome. Here, a UK insurer that’s been on my watchlist for ages just announced another special dividend, so I just had to get some before today’s ex-div. Is be cool if more companies did special dividends I think

    • M,

      I know! Talk about an announcement by TROW. Are you planning on buying now?? Which company did you just purchase? I like special dividends, don’t get me wrong. But I am torn if I would prefer if a company offered a lower yield with a periodic special dividend or if the company just paid a higher, regular dividend. Obviously either would be a great scenario, but I think I am leaning towards the latter scenario as it allows my regular income stream to be higher. But as I said before, I won’t complain with either scenario. Now, if only we can talk our high yielding companies paying an annual special dividend!

      Thanks for stopping by!

      Bert

  6. I only own KO and WMT out of the raisers for February but I own APD and I look forward to the next announcement. Hopefully they allocate more to the divided than to a buyback. I’d much rather get my cash in hand. TROW is definitely interesting with the special dividend. I’ve been looking to add another financial company to the mix and TROW might make the cut. CB is a top notch insurer and I think it’d complement my AFL position quite nicely. So many great companies and no where near enough capital.

    • JC,

      I agree. Buyback programs are nice, but they are a one-time event and don’t pay the bills (as you pointed out). I would rather a company pay a higher dividend so we can increase our regular income stream for a variety of reasons. Which other financial company are you considering?

      I wish we had unlimited capital so we could buy all of these companies. One day we will have skin in all of these great companies, so let’s hope that day arrives sooner rather than later!

      Thanks for stopping by.

      Bert

  7. I own or selected for my DSR portfolios many of the stocks you mentioned. These are great companies and I’m glad to see them increasing their dividend. Not planning on buying in the next days… but always good news for investors like us! 😉 March looks like a quiet month though, unless some major things happen!

    • DivGuy,

      This list consists of many great names and I would love to own many of the companies on the list. Congrats on having a position in some of them! March may be quiet on the capital infusion front for you, but not on the dividend receipt front. While you aren’t buying new shares, you will be receiving plenty via DRIP. Hopefully we are both wrong and I will be reading a purchase article summary from you soon.

      Thanks for stopping by!

      Bert

  8. ADM is on my watchlist looks like good entry points are on the way. Im also watching WMT but i havent really done the research on how the market really feels about their wage increases going forward. KO is also always on my list its just been a little pricey for me to get in.

    • Ben,

      ADM appears to be a great value right now, but I want to do a little more research to assess the company’s historical PE ratio to see if the valuation levels are truly undervalued or if the company is always trading at a discount compared to the broader market. Hopefully it is the former and it catapults me to purchase a new stock! I don’t think you will find too many opportunities to purchase KO at a discount. It is one of those companies that is always trading at a premium. But if the moment is right, you better believe I am going to pounce on it!

      Thanks for stopping by.

      Bert

  9. Happy to see quite a few names listed above in my portfolio. You just gotta love dividend increases. I’m never upset with a raise even a modest one. Thanks for sharing.

    • Congrats on the great month of dividend increases DivHut. You are right, how can you complain when a company decides to increase the cash flow you are receiving from it? That’s why I love investing in dividend growth companies!

      Thanks for stopping by.

      Bert

Leave a Reply

Your email address will not be published. Required fields are marked *